Business Directories

Iran, Turkmenistan reach gas deal

Tehran, February 15, 2009

Turkmenistan will export 10 billion cubic metres of gas per year to Iran, which in turn will help develop a gas field in its neighbour under an agreement, an official Iranian news agency reported.

The two energy powers, whose ties were strained last winter after Turkmenistan halted gas sales to Iran, agreed to boost cooperation during an official visit by Turkmen leader Kurbanguly Berdymukhamedov to Tehran.

Iran sits atop the world's second-largest natural gas reserves after Russia, but international sanctions imposed on Tehran over its disputed nuclear activities and other issues have slowed development of its own gas exports.

Under the deal, Iranian companies would develop a natural gas field in Turkmenistan and in exchange gas from this field would be exported to the Islamic Republic, Iran's official IRNA news agency said. It named the gas field as Bolutun.

'According to this agreement 10 billion cubic metres of gas will be exported to Iran per year from the Bolutun gas field,' Iran's Oil Minister Gholamhossein Nozari said.

He said the two sides had yet to reach a final agreement on the price of the exported gas, IRNA reported, giving no details on when the accord would take effect and gas exports start.

Turkmenistan, Central Asia's biggest gas producer, is seen as one of the key suppliers for the planned Nabucco pipeline from Turkey to Austria, designed to ease Europe's dependence on Russia for gas supplies.

Iran has long sought to promote itself as a transit route for oil and gas from central Asian states but the United States, which has not had diplomatic ties with Tehran since 1980, has been pushing for alternative export channels.

Iranian radio earlier quoted Berdymukhamedov as saying Turkmenistan wanted Iran to help in developing new gas resources in his country and in building a new gas pipeline.

Last winter, Iran suffered natural gas shortages when Turkmenistan halted gas exports of up to 23 million cubic metres a day to the Islamic Republic, citing technical problems. Turkmen exports to Iran resumed in April.

Turkmenistan 'would like to take advantage of Iran's cooperation in the exploitation of new gas resources, estimated at 14 trillion cubic meters, as well as the construction of a new gas pipeline,' the radio quoted Berdymukhamedov as saying.

He was speaking at a joint news conference with Iranian President Mahmoud Ahmadinejad.